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        <h1>
            News</h1>
        <h3>
            Motor insurance premiums levelling off</h3>
        <p>
            <em style="font-size: 0.8em; color: #666; line-height: 1.2em;">Source: The Business
                Times<br />
                Author: Samuel Ee<br />
                Date: 12/5/2010<br />
                URL: http://www.cpf.gov.sg/imsavvy/infohub_article.asp?readid={1022386267-5236-1518300175}
            </em>
        </p>
        <p>
            <img src="/images/content/news_2010-05-12.jpg" title="Motor insurance premiums levelling off" alt="Motor insurance premiums levelling off" width="250" height="224"
                style="float: right; padding-left: 25px;" />
            PREMIUMS for motor insurance seem to be finally levelling off after spiking up by
            as much as 40 per cent in 2009 in response to the industry's massive underwriting
            losses the year before.</p>
        <p>
            Among the Big Three motor insurers, premiums have either stayed the same or climbed
            slightly compared with a year ago (see table).</p>
        <p>
            Market leader NTUC Income's premium remains unchanged for a 32-year-old single male
            working in the banking sector with five years' driving experience, zero no-claims
            discount and who owns a one-year-old Toyota Corolla Altis.</p>
        <p>
            Income pointed out that if that same driver had remained insured with the company,
            his premium would actually be lower at $1,674, or 22.4 per cent less, because the
            driver is now a year older and has a 10 per cent no-claims discount.</p>
        <p>
            Over at AXA, the premium for the same driver profile edged up 8.7 per cent this
            year.</p>
        <p>
            As for Chartis Insurance, which is the new brand name for AIG, the equivalent premium
            has risen by 15.8 per cent.</p>
        <p>
            Last year, the motor insurance industry lost $44.5 million, which was down from
            2008's record loss of $214 million.</p>
        <p>
            NTUC Income's general insurance division's senior vice-president and general manager,
            Pui Phusangmook, said that for several years, motor insurance was severely underpriced
            due to the intense competition in the market.</p>
        <p>
            'This resulted in an underwriting loss of more than $200 million suffered by the
            industry in 2008,' he explained.</p>
        <p>
            So last year, Income's pricing for motor insurance focused on long-term sustainability.</p>
        <p>
            'Among the measures we implemented was an adjustment of our premiums to narrow their
            gap with market rates, while maintaining our competitiveness,' said Mr Pui.</p>
        <p>
            For this year, the industry looks like it will continue to remain in the red. But
            insurers seem more optimistic.</p>
        <p>
            'It appears Singapore's auto market for insurance will not suffer significant losses
            as it has for the last two years,' said Kevin Goulding, chief executive of Chartis
            Insurance Singapore.</p>
        <p>
            He added: 'We are hopeful the market will now stay on course in properly underwriting
            the auto portfolios and the temptations of increasing market share will not outweigh
            the necessary financial performance of our businesses.'</p>
        <p>
            More interestingly, the collective market share of the Big Three insurers has jumped
            from 57 per cent a year ago to 62 per cent in terms of motor premiums collected
            (see table). This is a result of last year's sharp premium increases and means that
            the Big Three's total share has risen back above the 60 per cent level, where it
            used to be about four years ago.</p>
        <p>
            In percentage terms, AXA has gained the most market share, rising from 11 per cent
            to 14 per cent currently.</p>
        <p>
            'It is an organic growth,' explained Alain Adiceom, CEO of AXA Insurance Singapore.
            'We focused on the price level and our services, and we explained the structure
            of our portfolio and the agents and customers have understood. Confidence in AXA
            has strengthened.'</p>
        <p>
            Mr Adiceom said that his objective is to have 'the right price showing the right
            value'. An actuary by profession, he said that AXA has a structured tariff.</p>
        <p>
            'We are using the multi-linear tool to understand behaviour of the customer for
            each class of brand and model,' he added.</p>
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